Correlation Between Telefonica and OTP Bank
Can any of the company-specific risk be diversified away by investing in both Telefonica and OTP Bank at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Telefonica and OTP Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telefonica SA and OTP Bank Nyrt, you can compare the effects of market volatilities on Telefonica and OTP Bank and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Telefonica with a short position of OTP Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telefonica and OTP Bank.
Diversification Opportunities for Telefonica and OTP Bank
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telefonica and OTP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Telefonica SA and OTP Bank Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OTP Bank Nyrt and Telefonica is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Telefonica SA are associated (or correlated) with OTP Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OTP Bank Nyrt has no effect on the direction of Telefonica i.e., Telefonica and OTP Bank go up and down completely randomly.
Pair Corralation between Telefonica and OTP Bank
If you would invest 962,498 in OTP Bank Nyrt on August 27, 2024 and sell it today you would earn a total of 1,231,502 from holding OTP Bank Nyrt or generate 127.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Telefonica SA vs. OTP Bank Nyrt
Performance |
| Timeline |
| Telefonica SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| OTP Bank Nyrt |
Telefonica and OTP Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telefonica and OTP Bank
The main advantage of trading using opposite Telefonica and OTP Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telefonica position performs unexpectedly, OTP Bank can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in OTP Bank will offset losses from the drop in OTP Bank's long position.| Telefonica vs. Delta Technologies Nyrt | Telefonica vs. Nutex Investments PLC | Telefonica vs. NordTelekom Telecommunications Service | Telefonica vs. Infineon Technologies AG |
| OTP Bank vs. NordTelekom Telecommunications Service | OTP Bank vs. Nutex Investments PLC | OTP Bank vs. Delta Technologies Nyrt |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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